AUD/USD Uptrend Resumes Despite Geopolitical Jitters
The AUD/USD pair managed to resume its uptrend and briefly surpass the key level of 0.6900, despite the US Dollar extending its weekly recovery on geopolitical jitters in the Middle East.
- The US Dollar: Extended its weekly recovery on geopolitical tensions.
- Ai Group Industry Index: Improved to -18.6 in September.
Factors Driving AUD/USD Movement
Despite the positive day for the US Dollar driven by safe-haven demand, the Aussie Dollar saw renewed buying interest due to:
- Decent gains in copper prices.
- Consolidation in iron ore prices.
- Stimulus packages to boost China’s economy.
Monetary Policy and Market Expectations
The Reserve Bank of Australia (RBA) kept rates unchanged at 4.35% during its recent meeting, signaling caution on inflation risks without immediate rate hikes. Markets anticipate a 55% chance of a rate cut by year-end, with the RBA expected to be among the last G10 central banks to reduce rates.
While the market has priced in Federal Reserve rate cuts, uncertainties around China’s economy and stimulus measures may impact AUD/USD movement in 2024.
Australia’s Ai Group Industry Index
The recent improvement in Australia’s Ai Group Industry Index to -18.6 in September indicates some positive developments in the country’s industrial sector.
AUD/USD Short-Term Technical Outlook
Further upside in AUD/USD could see it retesting the 2024 peak of 0.6942 before challenging the critical level of 0.7000. Support levels include the September low of 0.6622, the 200-day SMA at 0.6626, and the 2024 bottom of 0.6347.
On the four-hour chart, the bullish trend is resuming with resistance levels at 0.6942 and 0.7024. Support levels are at 0.6856 and 0.6817, with the RSI around 48.
Conclusion
The AUD/USD pair’s movement is influenced by a mix of geopolitical tensions, monetary policy decisions, and economic data. Understanding these factors can help investors and traders make informed decisions in the financial markets.